Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Lifevantage Corp (849146) 10-Q published on May 01, 2019 at 4:08 pm
Reporting Period: Mar 30, 2019
On February 1, 2019, the Company entered into a loan modification agreement, which amended the 2016 Credit Facility, as amended ("Amendment No. 2"). Under Amendment No. 2, the Company made a principal payment of $2.0 million and increased the revolving loan facility from $2.0 million to $5.0 million. Amendment No. 2 also revised certain financial covenants. The minimum fixed charge coverage ratio (as defined in Amendment No. 2) was revised from a minimum of 1.25 to 1.00 to 1.10 to 1.00, measured on a trailing twelve-month basis, at the end of each fiscal quarter. The minimum working capital was decreased from $8.0 million to $6.0 million.
Revenue in the Asia/Pacific & Europe region increased $3.1 million or 24.8% and $7.8 million or 20.5% for the three and nine months ended March 31, 2019, respectively, as compared to the prior year same periods. The year over year increase in this region was mainly due to increased revenues in our recently launched Taiwan market and substantial increases in our Europe, Thailand and Australia markets as we continue to focus on growth in these regions. Revenue in the Asia/Pacific & Europe region was negatively impacted approximately $0.5 million or 4.1% and $0.9 million or 2.3% during the three and nine months ended March 31, 2019, respectively, as compared to the prior year periods, by foreign currency exchange rate fluctuations. Revenue in Japan was negatively impacted approximately $0.2 million or 1.8% and $0.2 million or 0.7% during the three and nine months ended March 31, 2019, respectively, as compared to the prior year periods, by foreign currency exchange rate fluctuations. On a constant currency basis, revenue in Japan increased 2.1% and decreased 2.9% for the three and nine months ended March 31, 2019, respectively, as compared to the prior year periods. Revenue in Japan for the nine months ended March 31, 2019 decreased mainly due to an overall decrease in active members.
Cash used in financing activities during the nine months ended March 31, 2019 was $7.8 million as a result of our quarterly and accelerated principal payments on the 2016 Term Loan, shares purchased as payment of tax withholding and repurchase of company stock, partially offset by proceeds from stock option exercises. Cash used in financing activities during the nine months ended March 31, 2018 was $2.0 million as a result of our quarterly principal payments on the 2016 Term Loan and repurchase of company stock, partially offset by proceeds from stock option exercises.
During the nine months ended March 31, 2019, approximately 31.9% of our net revenue was realized outside of the United States. The local currency of each international subsidiary is generally the functional currency. All revenues and expenses are translated at weighted-average exchange rates for the periods reported. Therefore, our reported revenue and earnings will be positively impacted by a weakening of the U.S. dollar and will be negatively impacted by a strengthening of the U.S. dollar. Currency fluctuations, however, have the opposite effect on our expenses incurred outside the United States. Given the large portion of our business derived from Japan, any weakening of the Japanese yen will negatively impact our reported revenue and profits, whereas a strengthening of the Japanese yen will positively impact our reported revenue and profits. Because of the uncertainty of exchange rate fluctuations, it is difficult to predict the effect of these fluctuations on our future business, product pricing and results of operations or financial condition. Changes in various currency exchange rates affect the relative prices at which we sell our products. We regularly monitor our foreign currency risks and periodically take measures to reduce the risk of foreign exchange rate fluctuations on our operating results. Additionally, we may seek to reduce our exposure to fluctuations in foreign currency exchange rates through the use of foreign currency exchange contracts. We do not use derivative financial instruments for trading or speculative purposes. At March 31, 2019, we did not have any derivative instruments. A 10% strengthening of the U.S. dollar compared to all of the foreign currencies in which we transact business would have resulted in a 2.9% decrease of our nine months ended March 31, 2019 revenue, in the amount of $4.9 million.
On November 27, 2017, our Board of Directors approved a stock repurchase plan. Under the plan, which became effective on November 27, 2017, we were authorized to repurchase up to $5.0 million of our outstanding shares through November 27, 2020. On February 1, 2019, our Board of Directors approved an amendment to the share repurchase program to increase the authorized share repurchase amount to $15.0 million. The repurchase program permits us to purchase shares from time to time through a variety of methods, including in the open market, through privately negotiated transactions or other means as determined by our management, in accordance with applicable securities laws. As part of the repurchase program, we may enter into a pre-arranged stock repurchase plan which will operate in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934. Accordingly, transactions, if any, under the pre-arranged repurchase plan would be completed in accordance with the terms of the stock repurchase plan, including specified price, volume and timing conditions. The authorization may be suspended or discontinued at any time and expires on November 27, 2020. During the three months ended March 31, 2019, we repurchased 14,730 shares of our common stock on the open market at an aggregate purchase price of $0.2 million under this repurchase program.